Fintech enabler Plaid offers full support for DeFi

Fintech enabler Plaid offers full support for DeFi

Plaid, a fintech enabler owned by Visa, is currently working with no less than two decentralized finance (DeFi) startups, according to a recent report.

Keith Grose, head of Plaid UK, has always been an advocate of the evolution currently playing out in the cryptocurrency industry and how fintech firms can tap into that trend.

Presently, the company has a partnership with Uniswap-centered DeFi wallet Dharma, with the integration drawing support from Coinbase and other crypto exchanges. It is also partnering with Teller Finance, which is trying to introduce unsecured lending in Ethereum blockchain.

DeFi grows in popularity despite challenges

Although DeFi and open banking are operating on different levels of digital evolution, Grose says both can have an intertwined relationship where they can benefit from each other in terms of the access and use of financial assets.

He said DeFi is still far behind when it comes to standing in as the major financial route, but there are strong indications that it is getting there.

Salary Payments In Cryptocurrency Become More Popular Across The Globe

The main problem for DeFi’s use in Fintech firms is the fact that systems are entirely accessible to anyone, and the identities of the participants are usually hidden behind their wallet address. According to Grose, this makes it a difficult scenario in the digital world, where transaction security is of utmost interest.

DeFi moving in the right direction

Equipped with a massive $5.3 billion exit and a widely-used API, Plaid has played a big role in expanding consumer finance, as transaction data is easily shared with third-party fintech platforms.

But Grose, who thinks crypto is the way forward, says persuading banks and the mainstream financial players to do business with fintech is the right step. He also acknowledges that there are many more things to go right to conclude that DeFi is having the desired impact. Open banking can do a lot of things for fintech and Defi, he noted. The main goal is to enable people to easily use their crypto assets in combination with traditional payment and budgeting applications.

Grose is also excited about the prospect of decentralized derivatives exchange such as Andreessen Horowitz-backed dYdX.

Plaid provides an expansive view of all user assets with real-time data, which is different from DeFi, with the decentralized finance combining crypto lending with decentralized exchange. However, Plaid could have a more important role to play in the future, as it can make access to DeFi less daunting.